The story of the initial coin offering (ICO) in American law is a play in four acts: Kik Interactive, Telegram, LBRY and Ripple Labs.
With three of those four cases decided, and Ripple Labs exchanging dueling replies to motions for summary judgment on Friday, Dec. 2, we now enter the dénouement of a 10-year-long saga.
Preston Byrne, a CoinDesk columnist, is a partner of Brown Rudnick’s Digital Commerce Group. This article is excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
The story begins with long-forgotten projects like Mastercoin and Counterparty, was blasted into public consciousness with projects like Ethereum and now slowly dies as American crypto developers shun the mother country for greener pastures abroad.
If Ripple loses, as I expect it will sooner or later, its defeat would be highly symbolic. The company and its associated protocol are among the longest-running and significant cryptocurrency projects in the world. XRP is practically a household name.
Back in 2012, when Ripple was founded, the term “initial coin offering” did not exist. Neither did enforcement actions against the then-miniscule crypto industry. In fact, the U.S. Securities and Exchange Commission (SEC) wouldn’t announce its first settlement for alleged registration violation until November 2018 with the Airfox and Paragon ICOs. For context, Ripple’s network went into production on Jan. 1, 2013 – nearly six years earlier.
Apart from the fact that XRP has sat in the top 10 coins by market cap for nearly a decade, the Ripple project also represented a unique approach to consensus at a time when alternative approaches to blockchain coordination of any kind were only a few years old.
Generally speaking, blockchains in the 2013-2015 period worked in one of four ways:
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proof-of-work, which requires computation energy to secure the network
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proof-of-stake, which enables token…
